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By Michael CorkeryNew York Times News Service • Tuesday April 15, 2014 8:49 AM

Dogged by its failure to pass the Federal Reserve’s latest stress test and investigations of
fraud at its Mexican unit, Citigroup reported some good news yesterday: a first-quarter profit that
beat analysts’ expectations.

The adjusted quarterly profit rose about 4 percent, to $4.1 billion, on earnings per share of
$1.30, from the same period a year earlier, Citigroup said.

Financial analysts had been expecting earnings per share of about $1.13.

The profit numbers are adjusted for one-time events, such as adjustments to its debt values and
tax charges.

Even as the bank’s global business results brightened, Citigroup said yesterday that it found an
additional case of fraud in its Mexican unit. The corporation uncovered a second instance of issues
in its accounts receivable program involving a supplier to the Mexican oil monopoly Pemex.

The bank’s chief financial officer, John C. Gerspach, wouldn’t disclose the name of the supplier
but said the fraud involved less than $30 million in costs to the bank. The supplier is in the
process of paying back Citigroup, and the bank expects “full restitution,” Gerspach said.

As for its quarterly results, Citi’s latest decline in revenue reflects industry challenges in
both investment and consumer banking. Stricter regulations and low interest rates are weighing on
the trading operation, which once generated large profit for Wall Street banks such as
Citigroup.

At the same time, lending to consumers and businesses is rebounding but has hardly come roaring
back as economic growth remains slow.

“Despite a quarter that was difficult for our company, we delivered strong results,” Michael L.
Corbat, Citigroup’s CEO, said in a statement. “Both our consumer and institutional businesses
performed well, and we grew both loans and deposits while holding the line on our expenses.”